In Lasalle Bank National Association v. Ahearn , when Timothy Ahern received an $180,000 mortgage from Fremont Investment & Loan to purchase a home, the loan documents identified Mortgage Electronic Registration Systems, Inc. as the mortgagee of record -- meaning the latter entity had the right to foreclose in the event of a payment default. Yet, when Ahern later failed to pay his loan, Lasalle Bank claimed to be the holder of the mortgage and filed for foreclosure.
Interestingly, the Ulster County Supreme Court denied Lasalle's request for relief because the financial institution "lacked standing" -- it hadn't shown it had an interest in the mortgage when the action was filed.
On appeal, the Appellate Division, Third Department, found Lasalle, as an assignee of the mortgage, didn't have the ability to foreclose unless a "complete assignment" existed at the time the case was filed. (Apparently, the underlying paperwork had neither been completed nor delivered to the bank.)
In other words, LaSalle was foreclosed from seeking foreclosure.
For a copy of the Appellate Division's decision, please use this link: Lasalle Bank National Association v. Ahearn